When a member takes their pension, NILGOSC will check the pension that they have built up from 1 April 2015 to 31 March 2022. We will compare the career average pension built up with what they could have built up in the final salary scheme, had it continued. If the final salary pension is higher, the difference (the underpin) is added to their pension.
However, the check is complicated as the following parts of a member’s pension are excluded from the underpin check:
- extra pension bought by additional pension contributions (APCs) to boost their pension.
- extra pension that employers have bought for the member.
- extra pension that members have bought by paying additional regular contributions (ARCs) or added years that they have bought.
- transfers from a non-public service pension scheme.
- reduced contributions that members have paid while in the 50/50 section of the Scheme.
- any pension debits which apply because a member’s pension was shared with a former spouse or civil partner.
- any Scheme pays debits where a member has asked NILGOSC to pay their annual allowance tax charge for them with a corresponding reduction to their pension.
- additional voluntary contributions (AVCs).
Any additional pension contributions (APCs) that members paid to buy back pension that was ‘lost’ while they were away from work during the remedy period (1 April 2015 to 31 March 2022) are included in the underpin check. The corresponding period that members have paid for will also be included to work out the final salary pension for the underpin check.